Keeping important technologies under British (and Western in general) control

Cold_Collation

LE
Book Reviewer
The whole cost game is a blank canvas for any mischief maker who wishes to wield a spreadsheet or two. Far too often cost is the weapon wielded by the interest group to have their way without having to pay.
Yes, and I felt like the worst of 1970s/80s union mouthpieces as I was typing that.
Either you load on excessive cost or you ignore the long term costs.. either way damage is done in a way that is difficult to undo.
And that's where you need proper terms of reference and not just one political group's interests in mind.

Again, though, I appreciate the effort that would be needed to construct anything fair and coherent without it being bureaucrat's heaven.
 
I think a problem with the EU at least is its socialist virtue-signalling.

Years ago I was the news editor on a recycling publication. It was at the time that John Gummer was called a 'shīthead' by his Norwegian counterpart.

At the time, I used to have a fair bit to do with Gummer's PA and she explained it thus: Europe was very good at signing green initiatives, such as for materials segregation post-use. People would get green credits - money - for sorting materials but, with no post-use strategies, the sorted materials would go to landfill anyway.

Therefore, there was no green benefit.

Gummer was challenging this sort of thinking but his was an inconvenient voice. He was right, though.

On quality in terms of manufacturing, I've been involved over the last few years with a major engineering event at the NEC.

There has been a lot of interest in re-shoring work to the UK. We're not the only ones doing - witness Honda and Swindon - but the uninitiated would probably get a surprise if they knew just what a good manufacturing sector we still have.

In some cases, though, we need a better determinant of true cost rather than just a market cost.

The cost of a tonne of 'X' grade of steel, for instance, might be lower if bought from elsewhere. But what is the welfare cost if a steelworks in this country closes (steel is probably a poor example but let's go with it).

If the cost of buying the foreign steel is the cost of the steel plus the ongoing welfare costs of those put out of work in this country, which is in fact cheaper?

Okay, this all starts to get a little bit socialist and it runs very close to protectionism but I think there's more traction under this post-Covid. Not only have supply lines been seen to be vulnerable but there's a lot of anger towards China at the moment over this pandemic.
The last part is most definitely a valid point, but the question then comes, “who is picking up the tab”? If that ton of steel is in sheet form, and becomes part of a warship, then the taxpayer is paying. Thus the economic impact of steel manufacture capacity contraction on the welfare state is entirely valid, as it is the taxpayer from end-to-end that picks up the tab.

But if that ton of steel goes into a commercial ship, then the same impact is paid for by the government, but the ship owning company’s shareholders pay less for their ship, while the taxpayer body picks up part of the tab. It’s not a direct subsidy, but ends up being a subsidy. If say Cammell Laird can build a fleet of ships using steel from the UK or from a foreign source and they choose the foreign (cheaper) option, causing a steelworks to reduce output and lay off workers, is that the business of Cammell Laird?

The really unfortunate bit is that the government effectively subsidises the ship owners to buy cheaper ships at the expense of the economy and industrial capacity. Paying the ship builder to use foreign steel, in the final analysis.

It’s a tough one, but ultimately, unless the government owns the steelworks (as it has in the past), then they pick up the tab for commercial decisions outside their control.

I’m a diehard capitalist, life-long Conservative, but even I can see the dilemma here. An excellent post, @Cold_Collation!
 

Cold_Collation

LE
Book Reviewer
The last part is most definitely a valid point, but the question then comes, “who is picking up the tab”? If that ton of steel is in sheet form, and becomes part of a warship, then the taxpayer is paying. Thus the economic impact of steel manufacture capacity contraction on the welfare state is entirely valid, as it is the taxpayer from end-to-end that picks up the tab.

But if that ton of steel goes into a commercial ship, then the same impact is paid for by the government, but the ship owning company’s shareholders pay less for their ship, while the taxpayer body picks up part of the tab. It’s not a direct subsidy, but ends up being a subsidy. If say Cammell Laird can build a fleet of ships using steel from the UK or from a foreign source and they choose the foreign (cheaper) option, causing a steelworks to reduce output and lay off workers, is that the business of Cammell Laird?

The really unfortunate bit is that the government effectively subsidises the ship owners to buy cheaper ships at the expense of the economy and industrial capacity. Paying the ship builder to use foreign steel, in the final analysis.

It’s a tough one, but ultimately, unless the government owns the steelworks (as it has in the past), then they pick up the tab for commercial decisions outside their control.

I’m a diehard capitalist, life-long Conservative, but even I can see the dilemma here. An excellent post, @Cold_Collation!
Thank you.

I think it's a discussion worth the having - but as I say above good luck to anyone trying to sort out how to make it all work.
 
The last part is most definitely a valid point, but the question then comes, “who is picking up the tab”? If that ton of steel is in sheet form, and becomes part of a warship, then the taxpayer is paying. Thus the economic impact of steel manufacture capacity contraction on the welfare state is entirely valid, as it is the taxpayer from end-to-end that picks up the tab.

But if that ton of steel goes into a commercial ship, then the same impact is paid for by the government, but the ship owning company’s shareholders pay less for their ship, while the taxpayer body picks up part of the tab. It’s not a direct subsidy, but ends up being a subsidy. If say Cammell Laird can build a fleet of ships using steel from the UK or from a foreign source and they choose the foreign (cheaper) option, causing a steelworks to reduce output and lay off workers, is that the business of Cammell Laird?

The really unfortunate bit is that the government effectively subsidises the ship owners to buy cheaper ships at the expense of the economy and industrial capacity. Paying the ship builder to use foreign steel, in the final analysis.

It’s a tough one, but ultimately, unless the government owns the steelworks (as it has in the past), then they pick up the tab for commercial decisions outside their control.

I’m a diehard capitalist, life-long Conservative, but even I can see the dilemma here. An excellent post, @Cold_Collation!
The more important aspect of putting tariffs on steel is that there are a lot more people working for companies which use steel than there are people working for companies that make steel. If the high price of steel makes those companies uncompetitive, there may be more jobs in steel making, but a net loss of industrial employment overall. This has been a problem which American manufacturing industry has faced with the Trump tariffs on steel and aluminium.
 
The more important aspect of putting tariffs on steel is that there are a lot more people working for companies which use steel than there are people working for companies that make steel. If the high price of steel makes those companies uncompetitive, there may be more jobs in steel making, but a net loss of industrial employment overall. This has been a problem which American manufacturing industry has faced with the Trump tariffs on steel and aluminium.
An important difference between the US welfare system and many other countries stems from the US’s Federal structure. Unemployment benefit is a state-funded mechanism, whereas the Tariffs are a Federal initiative. This is both fair and unfair. Fair because say in Tennessee, we don’t have (and as far as I am aware have never had) any significant steelworks. We won’t get hit by massive unemployment claims from steel-related jobs when our major industry is agriculture.

But probably unfair if you’re in Pennsylvania, where any impact on the steel industry would be disproportionately felt. Then again, in good times when the auto industry and shipbuilders are ordering more steel, they benefit.
 
An important difference between the US welfare system and many other countries stems from the US’s Federal structure. Unemployment benefit is a state-funded mechanism, whereas the Tariffs are a Federal initiative. This is both fair and unfair. Fair because say in Tennessee, we don’t have (and as far as I am aware have never had) any significant steelworks. We won’t get hit by massive unemployment claims from steel-related jobs when our major industry is agriculture.

But probably unfair if you’re in Pennsylvania, where any impact on the steel industry would be disproportionately felt. Then again, in good times when the auto industry and shipbuilders are ordering more steel, they benefit.
The auto industry in particular are not happy with steel tariffs or import quotas. It's generally the smaller suppliers who get hit the hardest by this, as the bigger companies who are their customers insist that the smaller ones swallow the cost increases. These small companies employ a lot of people, but typically operate in very thin margins. A steel tariff can put them into bankruptcy pretty quickly.
 
The auto industry in particular are not happy with steel tariffs or import quotas. It's generally the smaller suppliers who get hit the hardest by this, as the bigger companies who are their customers insist that the smaller ones swallow the cost increases. These small companies employ a lot of people, but typically operate in very thin margins. A steel tariff can put them into bankruptcy pretty quickly.
Perhaps so, but as I said, it becomes an individual state issue, for better or for worse.
 

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